It is important to review your estate plan periodically. The goal is to determine whether updates or changes are necessary. Many people make the mistake of drafting an estate plan and then neglecting it, which can result in a plan that no longer works as intended or no longer reflects their family’s needs when they pass away.
But how often should you review it? There are two general approaches.
Making updates only when needed
One approach is to update your estate plan in response to major life events that signal a need for change. Examples of these events include:
- Marriage
- Divorce
- The birth of a grandchild
- The death of a beneficiary
- A medical diagnosis
- Significant changes in wealth
- Changes to tax codes or estate planning laws
The idea is to watch for major developments and consider whether they require adjustments to your plan. For example, getting married may mean adding provisions for a spouse. If one of your children has a child, you may want to include your grandchild as a beneficiary and leave them an inheritance.
Setting up a schedule
The drawback of relying solely on life events is that it can be easy to overlook changes or procrastinate when it comes time to make updates. To avoid this, some people establish a regular review schedule and examine their estate plan at set intervals. In some cases, no changes will be necessary. In others, significant updates may be required.
How often these reviews take place is a personal choice. Some people review their estate plan annually, every other year, or on another schedule that feels appropriate. The main risk with this approach is that the plan could be temporarily outdated if a major life change occurs between scheduled reviews.
Addressing your estate plan
A well-drafted estate plan can provide meaningful support for your family and offer peace of mind and a sense of security. It is important to understand the legal steps involved in creating the plan and making updates when necessary in the future.